Internet radio has been around for almost as long as the internet. Like many web trends, it started out as a resource for in-the-know computer geeks.
Now, roughly 52 million people are tuning in on a monthly basis, according to a study by Arbitron and Edison Media Research.
Listeners are attracted to the commercial-free programs and diverse music selection, and artists love the additional outlet for their music.
But a new Copyright Royalty Board decision pushed by the Recording Industry Association of America (RIAA), a trade group representing most mainstream record labels, might turn good old rock ‘n’ roll into cold, hard static.
The board announced a hefty hike in the cost of royalties paid by internet radio stations. “Radio and Internet Newsletter” reports that, effective retroactively through the beginning of 2006, online stations will be required to pay $.0008 per song, per listener. The amount jumps to $.0011 for 2007 and $.0014 the following year, with an annual minimum of $500 for each channel.
For indie stations such as Radio Paradise, the new royalty rates are devastating. Founder Bill Goldsmith says, “We are now liable for royalties, retroactive to the beginning of 2006, that are equal to approximately 125 percent of our income.”
Tim Westergren, founder of Pandora.com, one of the most popular sources of music on the web, calls the move a misguided attempt to solve the record industry’s business woes.
Unfortunately, there seems to be little that can be done. Webcasters have the option of moving their broadcast overseas, but as Pam McClusky, program manager of Ram Radio, an online country station, says, “I broadcast American music and this is going to bump us right out of our own country.”
Photo by yatego.
MM on March 14th, 2007 at 8:54 pm
I can’t figure out why these people are complaining. They are using the recording artists content to make money. I’m sure they wouldn’t post the contents of someone’s entire book to their site and sell ads around it expecting no one to care.